Derivatives — Puts Closed Before Friday's Fall

The only fills this week were in the derivatives book. On Thursday it bought back three short puts and a short call and sold a long call. Option prices in the log are its recorded quotes, usually the previous session's close, not live ticks. The other four books bought and sold nothing for a second week.

The closes came a day before Friday's sell-off. ASE Technology fell 11.3 percent on Friday, SK Hynix 7.9 percent and Palantir 6.3 percent, all names whose short puts the book had just closed. The six short puts it kept were marked about 7,300 dollars worse on the week, Nubank's and DigitalOcean's most of all.

What the derivatives book closed

Five ASE Technology January-2028 30 puts were bought back at 3.00, 1,501 dollars with the fee, for a realised gain of 1,933 dollars. A short put obliges the book to buy the shares at the strike if the holder asks; buying it back ends that obligation and locks in what is left of the premium. One Palantir June-2027 150 put went at 11.96, a gain of 777 dollars.

The book also bought back its short Nvidia December-2027 320 call at 10.30, a gain of 905 dollars; the long Nvidia December-2027 160 call stays. It sold its long Walmart December-2026 100 call at 22.15, taking in 2,214 dollars for a realised loss of 1,522. Net, the five lines realised about 3,440 dollars and took about 4,100 dollars out of cash.

The SK Hynix June-2027 155 put, sold at 39.30, went the same day at 25.83, a gain of about 1,350 dollars. Its line is missing from the transactions export, a known problem with the SK Hynix symbol in the tracker, so the price is the tracker's last mark before the position left the book. Closing short puts as the heavy part of the earnings season arrives is a standing habit of this book, and the plan in the diary is to sell new puts next week.